The shadow business secretary, Chuka Umunna, described RBS employees as public sector workers and said Labour would be taking a close look at the bonuses offered to the bank's senior staff.

The threat of a Commons vote to condemn the size of Hester's bonus was pivotal in persuading him to forgo his bonus, even though it had been sanctioned by the board and had the implicit endorsement of David Cameron.

Downing Street said it had no plans to urge other RBS board members to restrain the level of their bonuses, saying the bank's management was doing a good job. "It is important now that the current management team get on with the job," a spokeswoman for No 10 said.

She said RBS had been far too big and far too risky, but had reduced its balance sheet by half, as well as providing £20.6bn in loans to small- and medium-sized enterprises.

Downing Street denied the prime minister had made a misjudgment in assuming that Hester would resign if he was denied his bonus, the implications of some of his remarks on Saturday.

The spokeswoman said the government could not intervene further since, under the arrangements made by the previous government, salary levels were set by the board. The government had no plans to change those arrangements, she said.

Miliband said the row over Hester's bonus must not be a one-off and called on the government to introduce real change to the system by taxing bonuses and giving workers a say on top pay in every company.

The Labour leader told BBC News: "What we have seen in the last few days is the fact that the government has dragged its feet, has nodded this bonus through, and I think we have seen that they have got a completely tin ear when it comes to understanding what people are feeling.

"I think it is right that Labour had the parliamentary vote and I think that it was the threat of that parliamentary vote that led to change.

"But I don't think this can be just a one-off episode, because if we don't deal with this systematically, if we don't deal with the issue of bankers' bonuses in a proper way, this kind of thing is just going to recur.

"This isn't the best way of setting the pay for top chief executives, let's be honest about it. That is why we need real change – real change in the boardroom and new rules and real change from the government to say tax the bankers' bonuses until we see the change in behaviour that we need."

Labour still has an opposition Commons debate next week in which it could focus on the bonuses likely to be offered elsewhere in the banking sector in the next two months.

The foreign secretary, William Hague, defended the government, continuing to insist that Hester's contractual arrangements with RBS had been set by the previous Labour government, but not ruling out further action in the future.

Umunna told BBC Radio 4's Today programme: "RBS would not exist had not the government stepped in to save the sector from itself."

He said Hester had been set to take the bonus at a time when the bank was going to make 3,500 people redundant, its share price was falling and other public sector workers were taking a 1% pay cut.

"We will be taking a close interest in what is happening across the board at RBS given that this is more or less a state-owned institution," he added.

He said the planned £4.3m bonus for the senior RBS trader John Hourican was odd, but he would not pass judgment because he did not know the details of what had been negotiated.

He insisted bonuses should be for exceptional achievement, and accused the government of failing to show leadership.

"The government has been going around saying to the British public: 'Look, shareholders need to take a more active role in reining in excess, take an active role in the running of their companies' – and here is a prime example of where a government is a shareholder and it has failed to do so."

He suggested investors may be leading a wider cultural change, saying: "The encouraging thing is that we are seeing other shareholders in the City taking an active interest in these issues across the board, not just in RBS but at other banks … We know that the Association of British Insurers, which represents about one-fifth of the UK shareholder bases, are meeting with all the major banks to urge them to rein in excess, to adopt moderation."

He also praised the way F&C Investments was meeting Barclays to discuss salaries.

"The thing for politicians here … there has been a status quo that has existed for many years," he said. "And you have a bunch of vested interests, a closed coterie who have said, 'Look you cannot challenge a situation where people are already being paid huge sums of money simply for doing their jobs, you cannot challenge the status quo that sees a bonus as a form of natural entitlement.'"

About this article

Labour vows to maintain pressure on RBS bonuses

This article was published on
the Guardian website
at 06.44 EST on Monday 30 January 2012.
A version appeared in the Guardian
on Monday 30 January 2012.
It was last modified at 17.30 EDT on Tuesday 20 May 2014.
It was first published at 05.32 EST on Monday 30 January 2012.